Student Loans Through Your Credit Union

posted July 26, 2018 in Blog

In recent years the price of college tuition has seen a dramatic increase.  Student loans have become necessary for most families in order to afford the rising costs of college.  Many students realize that even if they get a federal loan, they still need more financial assistance. In those cases, a private loan may be a good choice. The options for private student loans are increasing with more credit unions entering the market.

Who can apply for a credit union private loan?

Depending on which credit union you go through the specific requirements will vary. In general, you must have $25,000 in annual income, a good credit score and a debt-to-income ratio less than 40%. Because most college freshman don’t meet these requirements, a cosigner is most often necessary. A cosigner can be a parent, grandparent or someone else. Students most often choose a parent because the cosigner assumes financial responsibility in the event they can’t pay the loan back. Most private student loans are originated with a cosigner.

How to apply for a private loan.

Once a cosigner has been secured the dollar amount of the loan being applied for will need to be established. When deciding this, students should consider how much they may have received in scholarships and other financial aid. Once the amount that is needed has been decided it is time to shop around! Students will want to look for low interest rates. The repayment terms on these loans are usually 10-15 years. The application process generally takes 15-20 minutes.

How to manage a private student loan.

Each year of college students will need to apply for a new loan. As students continue to apply and take out loans they should keep a list of their lenders and the terms of their loans as well as how much they are borrowing. It’s important for students to remember that interest accrues on the loan throughout the life of it. If they can make in-school payments it will lower the coast of their loan. Typically, once a student leaves school they will have a 6 month grace period before they must begin making their payments. They will have the responsibility of knowing what day each month they must make a payment. If they can set up an automatic payment they should.

If a private student loan sounds like it may be the best option for you, Greater Iowa Credit Union facilitates student loans through Sallie Mae. There is an undergraduate student loan, a parent loan and there are loans for graduate students. To learn more about these options and to apply click here. We’d love to help you meet your education and financial goals!

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